Schwartz Center revival in doubt: Officials say community support is a must

DOVER — As owners of the historic Schwartz Center building, Wesley College and Delaware State University officials said they are working with city leaders to find a way to keep the arts center functioning.

But they emphasized that community engagement and philanthropic support are critical to the success of any future operation there.

Wesley President Robert Clark said Thursday the two higher education institutions would continue as landlords, willing to offer the building rent free. It is in the heart of downtown Dover at 226 S. State St.

“Here is the property, make it work,” he said. “We want to be part of that community solution, but the key aspect going forward — we want to get that very critical and most important keystone cog back in, and that’s the community support.”

David Sheppard, general counsel for Delaware State University, said Friday: “We’re higher ed institutions. Running a theater business is not our expertise.”

Capital Theater, Schwartz Center for the Performing Arts view of the stage from the balcony seating area. (Delaware State News file photo)

College and city leaders met last week to discuss ways to maintain a cultural hub in the three-story brick building constructed in 1904.

“We’re exploring a myriad of possibilities. That includes getting other interested parties in the community now involved with the Schwartz, taking a look at what we can do to ensure the vitality of that building and our downtown, at a minimum taking a hard look at some of the commitments that were made to the community,” President Clark said.

“Both DelState and Wesley are committed to the arts and we are absolutely committed to the revitalization of our downtown.”

Mr. Sheppard said, “It’s not really in our interest to have the building sit vacant.”

Dover City Council President Tim Slavin said Friday he was talking to individuals in Dover as well as state Division of the Arts Director Paul Weagraff to gather ideas for who could make it work and how.

Some of the ideas and efforts were concepts that the current Schwartz board was working on, he said.

The Schwartz board of directors announced June 8 that the center would close June 30. Tracey Miller, president of the board of directors, has said the group will vacate the building that day, but keep the Friends of the Capitol Theater Inc. entity intact.

But Wesley and Delaware State University knew the nonprofit was in trouble this spring. There was a meeting with leadership in May when Ms. Miller and a few other board members explained the financial troubles and possible solutions.

President Clark said, “Tracey’s been very good and very upfront in communicating on behalf of her board.”

Ms. Miller has said the nonprofit couldn’t make enough to sustain operations despite the board laboring to raise funds and respond to community feedback with increased and diversified programming.

“We thought we were going to be able to figure out some more revenue sources. We just kind of ran out of time,” she said.

At the meeting, Mr. Sheppard said the Schwartz sought $175,000 in new funding, higher than the $120,000 the group received annually until a couple years ago.
He said the center’s leadership was told: “We are interested in helping, but in order to advance that we need to know what your business plan is.”

They had not developed one, he said. When the group — minus the college presidents — met in early June, he thought the Schwartz board members present expected to receive a check at that time.

“That was my feeling. They seemed a little bit annoyed,” he added.

Mr. Sheppard said Ms. Miller indicated the full board would have to discuss it, and then “within a week, we got an email from Tracey that they decided to cease operations.

“That brings us to today,” he said.

City of Dover gets involved

Councilman Slavin said he had been fielding calls from constituents who were concerned about the Schwartz news and people who didn’t want to see it close.

“All I’m trying to do is enable the conversation at this point. This isn’t something the city government is going to step into and solve this problem,” he said. “This is going to have to be a community-based solution and a partnership between a lot of different entities.”

“City finances have been very tight and we have virtually no grant- in-aid. It wouldn’t be a core city function to fund an arts center, but it’s in our best interest to make sure an arts center is open and working and available to our citizens.”

Mr. Slavin, who has never served on the Schwartz board and wasn’t involved as an elected official in the center’s problems in the past, said the community has shown a “longstanding support of arts and arts programming” and pointed to the long-operating Biggs Museum, Kent County Theatre Guild and Delaware Friends of Folk that have found success with broad-based support. “How do we include the Schwartz Center for the Arts in that conversation?” he asked.

He acknowledged there isn’t a magic-bullet solution to getting an organization into the Schwartz Center to offer programming.

“We don’t want to over-promise on this,” he said.

President Clark reiterated the need for deep community support.

“If you look across the country, there’s a lot of cities that have these small venues. If you look at every single one of them, the operating model that makes those entities successful is 50 to 60 percent of the support is philanthropic community engagement.

“As we look forward, the city’s obviously got an interest, the state’s got an interest. (Delaware State University and Wesley) have been supportive. But at the end of the day, it takes this holistic, collective — all entities in the community — to support a theater like this,” he said.

It was a massive and dedicated community campaign that reopened the theater in 2001 after it closed in 1982. The Friends of the Capitol Theater formed in 1996 and launched a $3.3 million capital campaign to renovate and modernize the building. Funds included $1.3 million from the General Assembly and $1.2 million in grants from philanthropic groups, including the Longwood Foundation and Delaware Community Foundation.

The city and higher education institutions don’t have a formal time frame to find a solution for reopening the theater, but Mr. Slavin said he plans to touch base next week.

President Clark said: “The purpose here is to look forward. How can we get the community actively engaged, so we can keep this historic entity that sits downtown vibrant and move it into the future.”

Lease details

Since Wesley and Delaware State stepped in more than a decade ago to salvage the nonprofit’s operations, the two institutions have invested at least $4 million in the Schwartz Center for the Arts, according to Mr. Sheppard. The mortgage was about $3 million, he said, split equally with Wesley and DSU.

The relationship began in 2004 and was formalized in 2007 when they entered into a lease with the Friends of the Schwartz Center II, a nonprofit formed to raise funds for the Schwartz.

Under that lease, the Schwartz Center did not pay rent, but handled routine costs such as utilities. Wesley and Delaware State funded major structural repairs needed for the building, such as HVAC issues.

In addition, from 2007 to 2015, DSU and Wesley contributed $120,000 annually to the Schwartz.

Over the years, Schwartz board members and executive directors and leaders of both Wesley and Delaware State have changed.

President Clark joined Wesley in summer 2015.

Mr. Sheppard has been representing Delaware State since January 2015.

Ms. Miller became board president in May 2016, when the current board became a formally seated working board rather than an advisory board. She also was handling executive director duties since that position went vacant in August 2016 when Sydney Arzt left after 19 months on the job.

Mr. Sheppard said the 2007 agreement also required each of the two institutions to contribute $60,000 a year to support the theater and the Friends of the Schwartz II to raise money from grants, contributions, in-kind donations and other sources.

“Each one of the players involved had a financial commitment. The requirement for Friends II was to raise funds or get grants to an amount equivalent to what had been raised at the end of the prior fiscal year,” he said, which was an obligation of $175,000.

“There was never a year, from 2007 to 2012 that Friends II ever met their burden with respect to the fundraising,” Mr. Sheppard said.

In August 2012, the Friends of the Schwartz II filed a certificate of dissolution with the state of Delaware.

“At that point, they are in breach of the agreement,” Mr. Sheppard said.

The Schwartz operated without a lease from 2012 to 2016, Mr. Sheppard said, and both institutions continued to give the center money until 2015, when it reduced the contribution to $55,000 each and then stopped altogether last year.

In the interim, there was an effort to turn the corporation over to the community, Mr. Sheppard said, which culminated in the working board seated in May 2016 that included spots for the chief financial officers of Wesley and Delaware State.

“When the lease was executed in May 2016, the expectation was we would no longer be providing financial support to the theater,” Mr. Sheppard said, noting that fact was conveyed well before that time to Schwartz leaders.

“It had never shown an ability to stand on its own two feet,” he said. “My understanding is it had always run deficits. There was not the requisite community involvement to make it successful.”

Ms. Miller has said the building was expensive, requiring more than $100,000 a year to run the theater, noting summer electric bills hit $7,000 for the 550-seat theater, and an additional $25,000 in liability insurance.

She said while ticket sales were up in the last year, they weren’t generating enough revenue to cover costs and private and corporate contributions were insufficient.

While DSU’s use of the Schwartz was minimal, downtown-based Wesley College uses it for a number of events through the year, from the nursing school pinning ceremony in May, to annual Founders Day programs in March, freshman convocations in August and special fundraisers.

President Clark said Wesley values the venue and is proud of what both institutions have been able to do to support the Schwartz and the community since 2004, but stressed that “for the building to come alive and be successful, it must have community support.”

“As committed to our community and as committed to the arts that we are, we can not do it alone,” he said. “We’ll provide the clay, you create the masterpiece — that’s our support, because at the end of the day, we don’t have the expertise to run a theater. We don’t have the resources, but we can provide the structure.”

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